AnswerThe U.S. Department of Labor recently published its final rule updating overtime regulations under the Fair Labor Standards Act. The new regulations, which double the salary basis exemption threshold to $47,476 annually and increase the “highly compensated employee” threshold from $100,000 to $134,004, will become effective December 1.

The DOL estimates that over 4.2 million employees, including over 55,000 Kentucky employees, will be affected by these changes. The Department also estimates that another 732,000 employees will begin receiving overtime because of the increased threshold. Employers are now faced with a simple choice: either increase employee salary levels to meet the increased exemption threshold, or maintain salaries below the new threshold with the understanding that any employee hours above 40 in any work week will be paid at one-and-a-half times the regular hourly rate.